Innovation in the Midst of Uncertainty – A Case Study of Mahindra Reva Electric Vehicles Private Limited

Abstract

This case deals with the unforeseen uncertainties faced by Reva, the first electric car of India, when it was launched in the Indian market. Mahindra Reva Electric Vehicles had taken up the challenge of manufacturing an energy efficient concept car and tried to achieve operational success. However, with its limited consumer pull, the company had to strengthen its marketing strategies to gain consumer acceptance. On the other hand, at the global level, the ecosystem lacked support from governments on the concept and infrastructure of this product category.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1: Comparison of BEV, HEV and FCEVs

Type of EVs

Battery EVs

Hybrid EVs

Fuel Cell EVs

Propulsion

Electric Motor Drive

Electric Motor Drive ICE

Electric Motor Drive

Energy System

Battery Ultra capacitor

Battery Ultra capacitor

ICE Generating Unit

Fuel cells

Energy Source and Infrastructure

Electric Grid Charging facilities

Gasoline Station

Electric Grid Charging facilities

Hydrogen Methanol or Gasoline

Ethanol

Characteristics

Zero Emission

Independence on Oil

100–200 KM Range

High Initial Cost

Commercially available

Very low Emission

Dependence on Oil

Very long Range Complex

Commercially available

Ultra-low Emission

Independence on Oil

High Energy Efficiency

Very High Cost

Under Development (2001)

Major Issues

Battery management

High Performance Propulsion

Charging facilities

Managing Dual Energy Sources

Dependence on Driving Cycle

Battery Cycle and management

Fuel Cell Cost

Fuel Processor

Fuelling System

Source: C. C. Chan, State of the Art of Electric and Hybrid Vehicle, Proceedings of IEEE, Vol 90, No 2, pp 247–275.

Exhibit 2: Growth of Human Population

The curve is directly proportional. It initiates from the coordinate (1800, 1) and moves through the approximate coordinates (1900, 2) and (2000, 6) to conclude at the approximate coordinate (2050, 10).

A curved graph shows Human population in billions on its y axis from 0 to 10 with intervals of 2. It shows Year on its x axis from 1800 to 2100 with intervals of 100.

Source: C.C. Chan, State of the Art of Electric and Hybrid Vehicle, Proceedings of IEEE, Vol 90, No 2, pp 247–275.

Exhibit 3: Growth of Population and Vehicles

The y axis has a scale of 0 to 12 with intervals of 2 and the x axis has years 2000 and 2050 showing the population of human and vehicles. There are two vertical bars representing Population and Vehicles. In 2000, human population was 6 billion and vehicles population was 1 billion. In 2050, the expected human population is 10 billion and expected vehicles population is 3 billion.

A vertical multiple bar graph shows Population in billions on its y axis and Year on its x axis.

Source: C.C. Chan, State of the Art of Electric and Hybrid Vehicle, Proceedings of IEEE, Vol 90, No 2, pp 247–275

Exhibit 4: Electric Propulsion Subsytem

There are three primary boxes representing Energy Source Subsystem, Auxiliary Subsystem and Electric Propulsion Subsystem. The Energy Source Subsystem consists of an Energy Refuelling Unit, Energy Management Unit and Energy Source that are connected to each other. From the Energy Source, power is supplied to the Auxiliary Subsystem through the Auxiliary Power Supply Unit to the Power Steering Unit (Steering Wheel) and Temperature Control Unit. From the Energy Source, power is also supplied to the Electric Propulsion Subsystem through the Power Converter that receives and supplies power to the Electronic Controller of brake and accelerator. The Electronic Controller also gets power from the Energy Management Unit. From the Power Converter, power is supplied to the Electric Motor and further to the Mechanical Transmission Unit that controls the wheels.

An exhibit shows the composition and functioning of an Electric Vehicle.

Source: C.C. Chan, State of the Art of Electric and Hybrid Vehicle, Proceedings of IEEE, Vol 90, No 2, pp 247–275.

Exhibit 5: Classification of HEVs

In a Series Hybrid System, there is an Electrical Link between the Battery and Power Converter. There is an Electrical Link between the Power Converter and Motor and a Mechanical Link between the Motor and Transmission (including brakes, clutch and gears). There is also an Electrical Link between the Power Converter and Generator and a Mechanical Link between the Generator and ICE. There is a Hydraulic link between the Fuel Tank and ICE.

In a Parallel Hybrid System, there is an Electrical Link between the Battery and Power Converter and between the Power Converter and Motor. There is a Mechanical Link between the Motor and Transmission (including brakes, clutch and gears). Also, there is a Hydraulic Link between the Fuel Tank and ICE and a Mechanical Link between the ICE and Transmission.

In a Series Parallel Hybrid System, there is an Electrical Link between the Battery and Power Converter. There is an Electrical Link between the Power Converter and Motor and a Mechanical Link between the Motor and Transmission (including brakes, clutch and gears). Also, there is a Hydraulic Link between the Fuel Tank and ICE. There is a Mechanical Link between the ICE and Generator and the Transmission and ICE.

In a Complex Hybrid System, there are two Power Convertors. There is an Electrical Link between the Battery and both Power Convertors. There is an Electronic Link between the first Power Converter and Motor and a Mechanical Link between the Motor and Transmission (including brakes, clutch and gears). Also, there is an Electrical Link between the second Power Converter and Motor/Generator and a Hydraulic Link between the Fuel Tank and ICE. There is a Mechanical Link between the Motor/Generator and ICE and between the ICE and Transmission.

Four figures show different systems of HEVs.

Source: C.C. Chan, State of the Art of Electric and Hybrid Vehicle, Proceedings of IEEE, Vol 90, No 2, pp 247–275

Exhibit 5 shows the four classifications of an HEV. This is essential to understand the technological changes that are happening in the EVs.

Fig (a) is an example of a series hybrid system.

Figure (b) is a series parallel hybrid system.

Figure (c) is a parallel hybrid system.

Figure (d) is a complex hybrid system.

Exhibit 6: Classification of HEVs

The first figure shows a longitudinal front-engine front-wheel drive configuration. The electric motor, clutch, gearbox, differential and driving wheels are connected.

In the second figure, fixed gearing has replaced the gearbox and the clutch is removed. The Electric motor, fixed gearing, differential and the driving wheels are connected.

In the third figure, the electric motor, fixed gearing and differential are integrated into a single assembly, while both axels point at both driving wheels.

The fourth figure shows a dual motor configuration in which two electric motors separately drive the driving wheels via fixed gearing.

The fifth figure shows an in-wheel drive configuration. Planetary gearing is employed where there is an integrated assembly of the electric motor and fixed gearing near both the driving wheels.

The sixth figure shows a gearless configuration in which the outer rotor is directly mounted on the wheel rim. There in an electric motor attached to both the driving wheels.

Six figures show different configurations of HEVs.

Source: C.C. Chan, State of the Art of Electric and Hybrid Vehicle, Proceedings of IEEE, Vol 90, No 2, pp 247–275

Exhibit 6 shows the different configurations of electric vehicles.

Figure A shows the first alternative which is a direct extension of internal combustion engine vehicles. The different components are an electric motor (M), a gearbox (GB), a clutch (C) and a differential (D) by incorporating both gearbox and clutch. The driver can shift the gear ratios and hence can provide different torque at different speeds.

Figure B shows an arrangement of electric motor, fixed gearing and a differential. We note that this configuration is not suitable for an ICEV as the engine by itself without clutch and gearbox cannot offer different torque at different speed.

Figure C shows a different configuration which is most commonly adopted by modern electric vehicles. In this concept, similar to the transverse front-engine front-wheel drive of the existing ICEV, the electric motor, fixed gearing and differential are integrated into a single assembly both at axle points at both driving wheels.

Figure D shows a dual motor configuration in which two electric motors separately drive the driving wheels with via fixed gearing. In this setting, other than the mechanical means, we need the differential mechanism. In an EV, this can be provided by two electric motors working at two different speeds. Depending on whether the driver is turning the EV towards the left or the right, the electric controller changes the speed accordingly.

The configuration E shows the fixed planetary gearing system which is used to reduce the motor speed to the desired wheel speed. It should be noted that the planetary gearing is favoured in this arrangement as it offers the advantage of high speed reduction ratio of the gears as well as inline arrangement of input and output shafts.

Figure F shows the gearless arrangement in which the outer rotor of the motor is directly mounted on the wheel rim. This configuration completely abandons any mechanical gearing and the in-wheel drive can be accomplished by having a low speed outer rotor electric motor inside a wheel. Hence the speed control of the motor is equivalent to the control of the wheel speed and also the speed of the vehicle.

The above six configurations demonstrate the size and application of different types of EVs. We are moving from configuration A which was a direct extension of the ICEV to configuration F which is under technology demonstration or small scale production. The selection of an EV configuration is an important decision to be taken before the EV is launched. The major criteria for this selection are based on compactness, performance, weight and cost.

Exhibit 7: Original Technical Specifications of REVA

1

Type

Two door hatchback

2

Payload

Two adults plus two children (227 kg)

3

City driving range

80 km

4

Top Speed

65 km per hour

5

Charge Time

80% 2.5 hours, 100% in 6 hours

6

Battery

48 V , 200 amp-hrs, EV tubular loaded acid batteries

7

Operating Cost

INR 0.40 per km

8

Length

2638 mm

9

Width

1324 mm

10

Height

1510 mm

11

Ground Clearance

150 mm

12

Minimum turning radius

3505 mm

13

Wheel Base

1710 m

14

Curb Weight

670 kg/without battery 400 kgs

15

Body Panel material

High Impact ABS vacuum formed panels

16

Frame Type

Welded tubular steel space frame

17

Suspension

Mcpherson Strut [front]

Solid axle with coil over springs[rear]

18

Motor

High torque [70 Nm] separately excited DC motor5 KW continuous , 13 KW peak

19

Controller

Microprocessor based with regenerative breaking

20

Charger

220 V, 2.2 KW, high frequency switch mode type

Source: Maini, D. S. (July, 2013). Reva EV, India’s Gift to the World. Random House India.

Exhibit 8: Chronology of Events

1994 Reva Electric Car Company (RECC) was founded by Chetan Maini, as a joint venture between the Maini Group of Bengaluru and Amerigon Electric Vehicle Technologies (AEVT Inc.) of the USA. RECC joined with several automotive experts to develop components for Reva. Curtis Instruments Inc. of USA developed a Motor Controller specifically for the car. The car had a high-tech power pack for which Tudor India Limited supplied customized Prestolite batteries. The charger for Reva was developed by Modular Power Systems of USA (a division of TDI Power). Later, RECC started manufacturing the charger themselves through a technical collaboration agreement between MPS and the Maini Group.

2004 GoinGreen of the UK entered into an agreement with RECC to import REVA cars and market them under the G-Wiz moniker.

2006 Reva received an additional investment of $20 million from Draper Fisher Jurveston and Global Environment Fund (GEF).

2008 A revamped Reva model was launched by name Revai. The company started production of a Lithium-ion variant called the RevaL-ion in 2009.

2009 At Frankfurt Motor Show, Reva presented its future models Reva NXR and Reva NXG. During the event Reva and General Motors India declared a technical collaboration to develop affordable EV for the Indian market. As a result of this General Motors India announced an electric version of their hatchback in the New Delhi Auto Expo 2010: named e-Spark, Reva was to provide battery technology.

2010 India’s largest sports utility vehicles and tractor maker Mahindra & Mahindra bought a 55.2% controlling stake in Reva. Following the deal, the company was renamed Mahindra Reva Electric Vehicles Private Limited. Mahindra’s president of automotive business, Pawan Goenka, became the new company’s chairman. As a result of the ownership change General Motors pulled out of the tie-up with Mahindra Reva that was to produce the e-spark.

2011 GoinGreen, the UK’s exclusive importer of G-Wiz, announced that it was no longer stocking the model (although it would order them on a 4–6-week lead time when requested by customers).

http://en.wikipedia.org/wiki/REVA. (n.d.). Retrieved November 12, 2015, from http://en.wikipedia.org.

Exhibit 9: Memorandum of Understanding Between Amerigon of US and Maini Group of India

0.1 Amerigon is a vehicle design, systems engineering, and component supplier to the world automotive industry. Principal emphasis is on development and production preparation of an exceptional electric vehicle suitable for final fabrication and sale in India. Amerigon has produced four generations of electric vehicles that incorporate the best design, system integration, and proprietary components available in the world. The results are incorporated in the design of a durable, low cost vehicle with superior performance, manufacturability, and appeal to the rapidly growing Indian middle class.

0.2 Maini is a diverse group of manufacturing companies based in Bengaluru, India. Founded 21 years ago, Maini is acknowledged as an innovator in its fields. The Maini Group is managed by technocrats and is primarily engaged in the manufacture of high-precision automotive components and assemblies for original equipment customers both in India and overseas. Customers include Bosch in Europe and General Motors in the United States. Maini also manufactures electrically powered material-handling equipment and has developed Chets, India’s first electric vehicle which is ideal for touring large factories. Chets has been approved and is subsidized by the Government of India.

0.3 Metropolitan areas of India and the rest of Asia are grappling with the immense problems of increasing fossil fuel consumption and air pollution. The need to solve these critical and rapidly growing problems have been recognized by all city corporations, local and federal Governments, and by a raft of international monitoring agencies. The problem is compounded by rapidly growing population and standard of living. These factors create an enormous demand for personal use vehicles, thus exacerbating already acute problems. India itself has the fastest growing middle class in the world, with substantial buying power. As an example, in the city of Bengaluru alone, the number of vehicles is growing by more than 200 every day. About the only long-term solution inside, and one which has unanimously been deemed as effective by development and environment agencies, is the introduction of the electric-powered town car.

1.0 Amerigon and Maini intend to collaborate jointly and on a long-term basis, both technically and financially, to develop, manufacture, and market electric vehicles primarily for requirements in India and other Asian nations. Amerigon and Maini both fully recognized the untapped potential and vast promise of India and other Asian nations immediately and over the long-term for electric vehicles. Essentially, compared with conventional vehicles, the EVs need to be produced in modest quantities, and at low prices, with corresponding affordable tooling and manufacturing costs, yet reflect the highest level of available technologies in design and function. Given these requirements, the Amerigon-Maini collaboration ideally matches and complements the capabilities of each entity.

1.1 Amerigon can supply proprietary critical and sophisticated components and subsystems developed and manufactured in the US. Amerigon is also recognized as one of the world’s best EV designers and system integrators. Maini offers the experience and expertise of a highly regarded experienced manufacturer possessing very affordable labour, unique facilities, and the ability to cost-effectively assemble and manufacture EVs in limited quantities. It has the capacity to both directly produce and readily procure precision and other components within India in accordance with Amerigon’s specifications. By combing the existing strengths and existing superior resources available in the United States and India, the result is a cost-effective and efficient collaboration ideally suited to meet the needs of the Indian market.

1.2 Apart from the all-round feasibility and complementing factors of the Amerigon-Maini match, the result also affords a partnership whereby Amerigon can place into use its developed technologies and Maini can capitalize on its manufacturing expertise and its respected position in Indian industry. By doing so, Amerigon will establish ready, long term markets, for its sophisticated high technology components and Maini will manufacture and sell to the Indian and Asian markets highly desirable, world competitive EVs.

2.0 Amerigon and Maini will enter a long-term resource collaboration and integration partnership, each pooling its strengths.

2.1 Maini will develop and manufacture components, according to a program developed by Amerigon, and provide highly skilled affordable labour and expertise, as well as the physical facilities for manufacture of EVs in India. Maini will also provide all local inputs including Market Research Data, vehicle requirements in India, and testing and marketing. If required, Maini will provide technical manpower at Amerigon to develop the capability to work the Amerigon’s and other US companies’ components and subsystems.

2.2 Amerigon will provide vehicle design and prototypes, appropriate highly sophisticated and high-tech components, and in cooperation with Maini, 10 to 15 production prototypes and initially 100 vehicle kits for assembly in India. Amerigon will also source as required, low cost tooling for initial vehicle kits.

2.3 Amerigon will continue exporting kits, with Maini providing assembly facilities, staffing, and those components which can be readily cost-effectively manufactured in India.

3.0 The actual workings of this unique and promising partnership will be discussed in detail, commencing soon after the acceptance of this Memorandum of Understanding.

Source: Maini, D. S. (July, 2013). Reva EV, India’s Gift to the World. Random House India.

Exhibit 10: Comparison Chart of Reva With Top Cars in the World

Brand

Model

Range (miles)

Mileage (miles/gallon)

Price (USD)

Ford

Electric

76

105

29,170

BMW

i3

81

124

43,350

Chevy

Spark EV

83

119

25,170

Volkswagen

e-Golf

83

116

35,450

Nissan

Leaf

84

114

29,010

Mercedes

B-Class Electric

87

84

41,450

Fiat

500e

87

116

32,300

Kia

Soul EV

93

120

33,700

Tesla

Model S

270

240

85,000

Mahindra Reva

e2o

75

5.84**

15,670

**miles/kWh

Source: “CO2 baseline database for the Indian Power Sector, Jan 2012” published by Central Electricity Authority, Ministry of Power, Government of India

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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